The trade deficit in November came in at USD 0.8 billion, narrowing USD 0.3 billion over one year. The deficit was slightly above the Bloomberg market consensus and our call of USD 0.7 billion. Total imports (FOB) contracted 12.8% yoy (10.1% decline in October) dragged mainly by manufactured goods. Exports contracted 9.0% yoy in November (-1.5% in October), hampered by weak coal dynamics. As a result, the rolling 12-month trade deficit reached USD 10.1 billion, narrowing from the USD 14.5 billion deficit recorded in 2022 (USD 15.3 billion in 2021). At the margin, our seasonal adjustment shows the trade deficit at a lower USD 7.3 billion (annualized), down from the USD 8.9 billion recorded in 3Q23 (USD 10.3 billion in 2Q23).
Imports fell sequentially, consolidating the expectation of weak domestic demand. Total imports (FOB) contracted 12.8% yoy in November (-10.1% in October), dragged by transport equipment (-57.7%), construction materials (-31.9%) and intermediate goods for industry (-20.8% yoy). In the quarter ending in November, imports contracted 15.9% yoy (-25.5% in 3Q23 and -19.5% in 2Q23). Imports excluding fuels and transportation equipment fell 18.6% yoy (25.6% contraction in 3Q23; -20.3% in 2Q23). At the margin, we estimate that imports fell 8.0% qoq/saar (-20.9% in 3Q23, -17.5% in 2Q23)
Commodities continued to drag exports in November. Exports fell by 9.0% yoy (-1.5% in October). Oil exports decreased 19.5% yoy (+28.4% in October), mainly due to lower volumes. Coal exports continued to fall sharply (-24.3% yoy; -36.9% in October), mainly due to a decline in prices. Exports excluding traditional goods (oil, coal, coffee and ferronickel), accounting for 45.1% of total exports, increased 10.7%. In the quarter ending in November, exports contracted 8.3% yoy (from the 19.1% yoy drop in 3Q; -21.5% in 2Q), dragged by double-digit decline of ferronickel, coal and coffee exports. At the margin, exports expanded 21.3% qoq/saar (-15.7% in 3Q23; -2.7 in 2Q23).
The current-account deficit should narrow significantly in 2023, aided by a weakening of domestic demand. We expect the CAD to narrow to 2.7% of GDP in 2023 (down from 6.2% in 2022) and to reach 3.1% in 2024.
